Amazon’s main control processes are S-Team Goal Reviews, QBRs, MBRs, and WBRs. But before any of these reviews can take place, the data to be reviewed must be properly collected. Here is how Amazon instruments this data collection:
First, imagine you run a small, single-person business. You do not need lots of instrumentation to understand how your business is doing. You see every dollar come in and every dollar go out, you get direct feedback from customers, and you have your hands and eyes on every piece of the business. The data finds you.
But as businesses grow, there are more layers between you and your customers. Your meetings and obligations prevent you from gaining firsthand insight into your business results and the customer experience. You become reliant on others for this information.
However, this is a problem because there is no incentive to share unfavorable information. In fact, there are zero incentives to seek out and share data that suggests things are broken and failing,
You must establish a scalable, reliable source of truth. A way to collect data and access reports that precisely represent the inputs, results, and the levels of speed, quality, and cost you are delivering to customers.
This is all common sense. The challenging piece is determining how to gather the right data to inform your business decisions and how to instrument its collection so it can be continuously monitored and evaluated.
Amazon does this by defining a large number of customer-facing, controllable input metrics and then building dashboards for all of them. This can be hundreds of metrics in a single business unit. This data is viewed with real-time dashboards, daily reports, and other mechanisms.
Each week in the Weekly Business Review (WBR), Amazon executives examine all of these customer-facing metrics to quantitatively and comprehensively answer three questions:
1) How did the business do last week?
2) What did our customers experience last week?
3) Are we on track to hit our goals?
Then, these numbers are rolled up into the business reviews that occur monthly and quarterly.
The WBR is the first-level control mechanism through which Amazon executives observe and evaluate the state of the business. This happens every week, is non-negotiable, and must be driven by up-to-date, in-depth metrics.
All of this starts with proper data collection and instrumentation.
If you want to learn more about what metrics to track and how to track them, check out our input metrics course: https://lnkd.in/eKy3mqFc
